In last-ditch effort to delay power rate hike, business leaders turn to PM

Raising the Ft rate now will force businesses into the red and undermine their competitiveness at a time when they are heavily in debt and still recovering from the pandemic, they told a press conference they described as “urgent” on Friday.

The government plans to increase the rate on January 1 by 93.42 satang, up from its current 4.72 baht to 5.69 baht per unit.

The press conference was organised by the Joint Standing Committee on Commerce, Industry, and Banking – a business lobby group. It wants the Ft rate rise postponed until the second half of 2023 but some business leaders want it delayed until 2024. Sources said the standing committee’s chair, Sanan Angubolkul, was expecting to hear from the prime minister tonight.

Press conference speakers comprised Federation of Thai Industries renewable energy advisor Suwat Kamolpanus, Thai Retailers Association president Yol Phokasub, Thai Hotels Association president Marisa Sukosol Nunbhakdi and the chair of the board of directors of Siam Cement, Roongrote Rangsiyopash.

Yol said the retail and service sectors are overburdened due to high wages, interest rates, and other costs, while revenues are low.

"Electricity costs range from 20% to 50% [of all costs] in the retail and service sectors ... Electricity costs will rise by more than 20% .. if the Ft is adjusted," he said. "I'm concerned this will result in negative income and undermine the competitiveness of entrepreneurs."

Rising electricity costs will damage the hotel industry, Marisa said.

The tourism industry is showing signs of recovery, but not every hotel, particularly medium and small-sized hotels, has recovered to pre-pandemic levels, she said.

The cost of electricity is usually equivalent to 5% of total costs and revenues, but it is now about 11% of total costs and 6-8% of revenue, Marisa added.

"COVID-19 has had the greatest impact on us. Tourist numbers are currently far below what they were. As a result, we require more time and supportive measures to recover. The increase in the Ft fee will cost us more money, which we will be unable to pass on to our customers," she explained.

Roongrote said that if the government insisted on increasing the Ft fee, it would force large manufacturers to relocate their production bases, especially those who use large amounts of electricity like cement, ceramic, metal, and glass-making makers.
Mid-sized businesses will take a bigger hit, he said

"Most manufacturers are medium-sized businesses and they might be wiped away [by the Ft rate hike]," he said.

Renewable energy advisor Suwat urged the government to review assumptions made in the new Power Development Plan by reducing the proportion of natural gas, particularly liquefied natural gas (LNG), in order to avoid high electricity costs.

LNG will be imported so controlling its costs will be extremely difficult, Suwat said. However, if the government can reduce the use of LNG by encouraging greater use of renewable energy this problem will be solved in the long run and Thailand will achieve energy security, he said.